iOS: What are DISTRIBUTION provisioning profiles used for?

Absolutely yes. The distribution profile is used for submission to the App Store. It does not have the 100 device limit that the development profiles have.

From the Tools Workflow Guide:

When you’re ready to share your app for user testing or for general distribution through the 
App Store, you need to create an archive of the app using a distribution provisioning 
profile and send it to app testers or submit it to iTunes Connect. This chapter shows 
how to perform these tasks.

The distribution profile prevents the attackers from submitting a modified version of your app to the store - only you, who hold the private key of the distribution certificate, can submit and update your app.

Once your app is submitted, your embedded.mobileprovision and your binary will be checked and compared to make sure that you are the legitimate author. embedded.mobileprovision file is then discard and the app is signed again by Apple using their own certificate (which is by default accepted by all iDevices), so that all iDevices can run it.

When an iDevice downloads the app, the executable binary is then encrypted with an encryption key associated that device. At run time, only that device can decrypt the executable binary and run it.